If there's one thing that's clear about the market at this stage, it's that old-school stocks are uncool. The likes of Woolworths Limited (ASX: WOW) and Super Retail Group Ltd (ASX: SUL) have been sold down for a variety of reasons, including the absence of growth and impending fears of Amazon's entry into Australia.
Still, there may be some opportunities for income-seeking investors:
Telstra Corporation Ltd (ASX: TLS) paid an 8% fully franked dividend last year, although this is expected to drop to around 20 cents over the next few years (5%-6% yield) as the company reinvests heavily in its network and new technology. Telstra has some risks, including its large debt pile and increasingly aggressive competition from the likes of TPG Telecom Ltd (ASX: TPM).
However, Telstra has one of the strongest and most recognised brands in Australia, and has several growth opportunities via its smaller NAS and global enterprise businesses. With a sustainable ~5% fully franked dividend, Telstra is worth a closer look for income investors.
Coca-Cola Amatil Ltd (ASX: CCL) has seen its shares fall 20% this year as increasing competitive fears and friction with some major customers has spooked investors. Like Telstra, Amatil carries a lot of debt and is experiencing fierce competition and some sales declines in its core business. Amatil has several growth opportunities in the alcohol segment, and its international businesses, New Zealand + Fiji, Papua New Guinea, and Indonesia.
Amatil does not appear as good value as Telstra, but with strong brands, reliable demand, and a 5.9% dividend yield franked to 70%, it could also be worth a closer look.
